How rich countries became rich and why poor countries remain poor: It's the economic structure…duh! |
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| Institution: | 1. Department of Neurology, National Institute of Mental Health & Neurosciences (NIMHANS), Bangalore 560029, India;2. Department of Neuroimaging & Interventional Neuroradiology (NIIR), National Institute of Mental Health & Neurosciences (NIMHANS), India;3. Department of Neurochemistry, National Institute of Mental Health & Neurosciences (NIMHANS), India;1. National Research University Higher School of Economics, Myasnitskaya 20, 101000 Moscow, Russia;2. Netherlands Interdisciplinary Demographic Institute/University of Groningen, Lange Houtstraat 19, 2511 CV The Hague, The Netherlands;3. Institute of Geography, Russian Academy of Sciences, Staromonetniy pereulok 29, 119017 Moscow, Russia |
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| Abstract: | Becoming a rich country requires being able to produce and export commodities that embody certain characteristics. We classify 779 commodities (exported) according to two dimensions: (1) sophistication (measured by the income content of the products exported) and (2) connectivity to other products (measured by how easy it is to ‘jump’ into other potential exports). We identify 88 “good” products (highly sophisticated and well connected products), 93 “bad” products (unsophisticated and poorly connected products), and 598 “middle” products. Then, we categorize 154 countries into four groups according to the export share of each of these three types of products. There are 21 countries whose export baskets contain at least 15% of “good” products; 41 countries with a significant share of relatively sophisticated and well connected products; 50 countries with a significant share of relatively unsophisticated and not well connected products; and 42 countries whose export basket contains at least 15% of “bad” products. |
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| Keywords: | Bad product Good product Proximity Sophistication Structural transformation |
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